ID theft services, which offer to help consumers monitor their credit accounts or restore identities for a fee, are a waste of money, suggests a new report from the investigative arm of Congress, the Government Accountability Office.

“We did not identify any studies that analyzed whether consumers who sign up for or purchase identity theft services encounter fewer instances of identity theft or detect instances of financial or other fraud more—or less—rapidly than consumers who take steps on their own,” the authors say.

Additionally, the services could actually create more opportunities for hackers to steal from you, the report observes. “One consumer group representative noted that identity monitoring services require consumers to provide additional personal information to enroll—which also could be compromised if the service provider’s information were breached,” the GAO report states.

The authors point out the services have limitations: among them is the vendors don’t address all data breach risks.

The Federal Trade Commission and Consumer Financial Protection Bureau urge people considering paying for ID theft services to compare them with free or low-cost options before signing up.

Hackers can make purchases, take out loans or seek medical care in a victim’s name with stolen financial account numbers, passwords and Social Security numbers.

If you haven’t been a victim of ID theft, you probably know a few people who have.

For FREE information on how to protect yourself from ID theft and how to “freeze” your credit to prevent hackers and unauthorized persons from accessing your credit files, visit the website of the North Carolina Attorney General: https://www.ncdoj.gov/Consumer/Credit-and-Debt/2-4-3-1-1-Freeze-Your-Credit.aspx

A “security freeze” blocks access to your credit unless you have given your permission. This can prevent an identity thief from opening a new account or getting credit in your name. All consumers can get a free security freeze online, by phone or by mail. A security freeze, also known as a credit or a file freeze, can be lifted (or “thawed”) temporarily when you are applying for credit, or removed permanently.

Parents and guardians can also shield their children’s credit report with a special Protected Consumer security freeze. These freezes can also be used to safeguard incapacitated adults.

How a Security Freeze Works:

Once you’ve placed a security freeze on your credit, a creditor who asks to see your file will see a message that your file is frozen. The creditor will not see your credit score, and may treat your application as incomplete but not rejected.

Government agencies collecting child support payments or taxes and your existing creditors or collection agencies acting on their behalf can continue to access your credit despite the freeze.

Other creditors may also use your information to offer you pre-approved credit. You can stop most credit offers by calling (888) 5-OPT-OUT or visiting www.optoutprescreen.com

You will still be able to get a free copy of your credit report annually from each credit bureau.

North Carolina Attorney General Josh Stein led a coalition of 25 states urging the Consumer Financial Protection Bureau (CFPB) to take immediate action to protect consumers from abuses in payday lending, vehicle title lending, and other types of high-cost exploitative consumer lending.

“In North Carolina, we drove out the payday lenders who hurt working people with loan shark interest rates,” said Attorney General Josh Stein. “I urge the CFPB to protect borrowers from these abusive loans that put borrowers on a debt treadmill and, all too frequently, lead to default.”

It was announced by CFPB in 2017 that a new rule would help protect borrowers and ensure they’d have the ability to repay loans while also prohibiting lenders from using abusive tactics when seeking repayment. The rule went into effect in early 2018, but compliance was delayed to Aug. 19, 2019, to give lenders time to develop systems and policies. CFPB has now proposed to further delay compliance to Nov. 19, 2020, more than three years after the regulation was finalized. At the same time, CFPB is reviewing another rule that would altogether rescind this one.

Together, these actions would put at risk hard-fought borrower protections. In their comments, the attorneys general cite CFPB’s own findings that demonstrate the many ways the short-term payday and title lending model is broken – specifically as a significant percentage of these loans are expected to fail. In fact, 90 percent of all loan fees come from consumers who borrow seven or more times in 12 months. Twenty percent of payday loan transaction series end in default and 33 percent of single-payment auto title loan sequences end in default.

Attorney General Stein is joined in filing these comments by the Attorneys General of California, Colorado, Connecticut, the District of Columbia, Delaware, Hawaii, Iowa, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York, Nevada, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.

The Federal Trade Commission has charged a mortgage loan modification operation with deceiving financially distressed homeowners by falsely promising to prevent foreclosure and make their mortgages more affordable. A federal court temporarily halted the scheme and froze the defendants’ assets at the FTC’s request.

According to the FTC, the defendants typically charged consumers $3,900 in unlawful advance fees, in $650 monthly installments, falsely promising expert legal assistance and touting a 98-100 percent success record. They also allegedly misrepresented they would cut homeowners’ interest rates in half and reduce their monthly mortgage payments by hundreds of dollars.

The FTC alleges that the defendants used doctored government logos in correspondence with consumers, falsely suggesting they were affiliated with or endorsed by the federal government’s Making Home Affordable loan modification program. They also claimed to have special relationships with particular lenders and unlawfully told consumers not to pay their mortgages to or communicate with their lenders. In many instances, the FTC alleges, consumers paid hundreds or thousands of dollars only to learn that the defendants had not obtained the promised loan modifications, and in some cases had never even contacted the lenders. As a result, many people incurred substantial interest charges and other penalties for paying the defendants instead of their mortgage payments, and some lost their homes to foreclosure.

The FTC appreciates the assistance provided by the Utah Attorney General’s Office, the Utah Department of Commerce – Division of Consumer Protection, the New Mexico Attorney General’s Office, the Connecticut Department of Banking, and the Oregon Department of Consumer and Business Services in bringing this case. The Commission vote approving the complaint was 2-0. The U.S. District Court for the Nevada entered a temporary restraining order against the defendants on January 10, 2018.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

Every few months it seems we hear about another major hack of consumer information from some huge company. None, however, had quite the chilling effect as the data breach at Equifax, one of the “big three” credit bureaus. The Better Business Bureau now warns consumers that is probably no longer a matter of if your data is available to scammers but more a matter of when they will use it against year. If you were a victim of the Equifax data breach (and most American adults were), Identity thieves now have everything they need to steal your identity and open new accounts in your name.

With this new fear, however, comes a lot of good information. For the first time, millions of consumers are adding fraud alerts to their credit reports, or considering a credit freeze or a credit lock. Our friends at the Federal Trade Commission recently explained how these three differ, and what each can do to protect your personally identifiable information.

Fraud Alert

What is it? A fraud alert requires companies to verify your identity before extending new credit. Usually that means calling you to check if you’re really trying to open a new account. How does it work? The process is easy – you contact any one of the three nationwide credit reporting agencies (Equifax, Experian, TransUnion) and that one must notify the other two. How long does it last? An initial fraud alerts last 90 days. After 90 days, you can renew your alert for an additional 90 days, as many times as you want. Military who deploy can get an active duty alert that lasts one year, renewable for the period of deployment. Identity theft victims (whose information has been misused, not just exposed in a breach) are entitled to an extended fraud alert, which lasts seven years. How much does it cost? Fraud alerts are free. Is this for me? With a fraud alert, you keep access to your credit and federal law protects you. But an initial fraud alert lasts only 90 days and then you’ll need to remind yourself to renew it every 90 days.

Credit Freeze

What is it? A credit freeze limits access to your credit file so no one, including you, can open new accounts until the freeze is lifted. How does it work? To be fully protected, you must place a freeze with each of the three credit reporting agencies. Freezes can be placed by phone or online. You’ll get a PIN to use each time you freeze or unfreeze, which may take one to three business days. How long does it last? A freeze lasts until you temporarily lift or permanently remove it (except in a few states where freezes expire after seven years).

How much does it cost? Fees are set by state law. Generally, it costs $5 to $10 each time you freeze or unfreeze your account with each credit reporting agency. You can get a free freeze if you are an identity theft victim, or in some states, if you’re over age 62. Equifax is offering free freezes until January 31, 2018. Is this for me? Freezes are generally best for people who aren’t planning to take out new credit. Often, that includes older adults, people under guardianship, and children. People who want to avoid monthly fees also may prefer freezes over locks.

Credit Lock

What is it? Like a freeze, a credit lock limits access to your credit file so no one, including you, can open new accounts until you unlock your credit file. How does it work? Like a freeze, to be fully protected, you must place locks with all three credit reporting agencies. With locks, however, there’s no PIN and usually no wait to lock or unlock your credit file (although the current Equifax lock can take 24 to 48 hours). You can lock and unlock on a computer or mobile device through an app – but not with a phone call. How long does it last? Locks last only as long as you have an ongoing lock agreement with each of the credit reporting agencies. In some cases, that means paying monthly fees to maintain your lock service.

How much does it cost? Credit reporting agencies can set and change lock fees at any time. As of today, Equifax offers free locks as part of its free post-breach credit monitoring. Experian and TransUnion may charge monthly fees, often about $20. Is this for me? Depending on your particular lock agreement, your fees and protections may change over time. So, if you sign up for a lock, it’s hard to be sure what your legal protections will be if something goes wrong later. Also, monthly lock fees can quickly exceed the cost of freezes, especially if the lock fees increase over time.

Additional information:

BBB offers advice in the wake of a data breach: go.bbb.org/databreach

FTC’s Credit freeze FAQs, Fraud alert or credit freeze – which is right for you?, and Free freezes from Equifax.

If your personal information is misused, visit IdentityTheft.gov to report identity theft and get a personal recovery plan.

What happened? Equifax is a national credit bureau that collects information about the credit history of individual Americans. The company experienced the most significant security breach in American history. Hackers accessed the private information of an estimated 5 million North Carolinians. Information that can be used to commit ID theft and financial fraud including full names, dates of birth, Social Security numbers and in some cases driver license numbers, were stolen.

What is North Carolina Attorney General Josh Stein doing about it? Attorney General Stein is taking action on behalf of North Carolina consumers affected by the breach. He is taking a lead role in an investigation into Equifax conducted with a bipartisan group of attorneys general from across the nation. In addition, Attorney General Stein has contacted Equifax to demand more information about how this breach occurred and what the company is doing to protect affected consumers. He has also written to the other two national credit bureaus (Experian and TransUnion) seeking information about their processes and how they plan to protect individual consumer’s private information going forward.

What do you need to do about it? First, find out if you are impacted. If you are, we strongly suggest you consider freezing your credit with all of the credit reporting services. (You should also start checking your credit reports periodically – if you see a credit card or a charge account you don’t recognize, it could be a sign of ID theft or financial fraud.) Even if you aren’t impacted by this particular breach, we still recommend these steps.

“Chip” credit cards have reduced overall credit card fraud, but New Account fraud (where someone opens a new account using your name and information) has increased. Security freezes, also known as credit freezes, protect you against New Account fraud.

National news stories about the Equifax breach often say that you have to pay to freeze your credit. That is not true in our state – Security freezes are free for North Carolinians if you do them online. So it takes some of your time, but none of your money, to freeze access to your credit reports.

How to Get Free Security Freezes Online To establish your security freezes, you will need to contact each of the three credit bureaus online:

(Note: the links above will take you to the websites for the three credit bureaus. These sites are separate from www.ncdoj.gov.)

Be prepared to provide detailed information about yourself, including:

Your Full Name

Your Address

Your Date of Birth

Your Social Security Number

(Note: The credit bureaus already have this information in their files. You will be providing it to verify your identity. You may also be asked questions about your financial history, previous addresses where you may have lived, etc. to help confirm your identity to the company.)

Keep Your PINs or Passwords When you freeze your credit online, the company will assign you a PIN (Personal Information Number) or password. Make sure to print or write down your PIN, and keep it in a safe place. You will need it when you lift or remove your security freezes, and this online transaction may be the only time the company displays your PIN to you.

If You Lose Your PIN If you lose your PIN or password, the company must give you a new one free of charge. If you lose it a second time, the company can charge up to $3 to give you a new one.

To receive a new PIN from Equifax or TransUnion, you must make your request in writing and provide proof of identification. (A copy of your driver’s license, passport, birth certificate, etc.) Mailing addresses for those credit bureaus can be found below. To receive a new PIN from Experian, visit this page and select “Retrieve My Personal Identification Number.”

How to get Security Freezes by Phone or Mail You can also establish and manage a security freeze by mail or phone. These methods are always free for identity theft victims who have filed a police report, their spouses, and consumers over the age of 62. Other consumers can be charged up to $3 per credit bureau each time they establish a security freeze by mail or phone, although some credit bureaus are not currently charging consumers these fees. Before requesting a security freeze by mail or phone, check the credit bureau’s website to see if they charge a fee.

Security Freezes by Mail Credit bureaus will usually comply with your written request for a security freeze within three business days after they receive it. To request a security freeze by mail, send a letter to each of the three credit bureaus at the addresses listed below.

If the credit bureau charges a $3 fee for security freezes by mail, include payment by check, money order or major credit card. (Include the card name, account number, expiration date, and three or four digit identification number on the back of card.)

To save time, you can use our Security Freeze Request form letters for Equifax, Experian, and TransUnion. Enter your personal information on each letter, then print each letter and sign it. You can send your letters to the three credit bureaus by first-class mail, but for additional security you may want to send them by certified mail.

(Note: The credit bureaus already have your name and other personal information in their files. You will be providing it to verify your identity.)

Security Freezes by Phone Most credit bureaus will usually comply with your request by phone for a security freeze within 24 hours. To place a freeze by phone, call each of the three credit bureaus. Be prepared to supply the information listed above including your driver’s license number and account numbers. If the credit bureau charges a fee for security freezes by phone, be prepared to provide payment information.

Keep Your PINs or Passwords When you establish a security freeze with a credit bureau, the company will provide you with a PIN (Personal Information Number) or password. Make sure you keep this information in a safe place. You will need it when you lift or remove your security freeze.

(Note: If you get your freeze by phone, be ready to write down your new PIN. Near the end of your call the automated system may state your PIN quickly, and with little or no warning. Your PIN may not be repeated, so be prepared to write it down.)

Finally, scammers are always on the lookout for situations they can exploit to steal your money and as expected they are piggybacking on the Equifax breach. Beware of scammers trying to capitalize on the Equifax breach.

Debt collection scams remain the top complaint among consumers in 2016 at 28 percent of all gripes, and impostor scams have become the second most common category of consumer complaints.

This development comes from more than three million reports that the Federal Trade Commission gathered from all over the United States, now contained in the latest annual consumer sectional data book released by the FTC, according to an ethnic media telebriefing moderated by National Media Network Director of the New America Media Odette Keeley on the 2016 top ten scams in America.

The FTC wants all consumers to be aware of these scams so they may be forewarned and not fall victims to unscrupulous modus operandi that continue to abuse victims, particularly seniors, retirees and undocumented immigrants. The FTC’s Consumer Sentinel Data Book has both national statistics and a state-by-state listing of the consumer protection issues reported to the FTC in 2016; it is also broken down by states and areas with the most reports per capita.

Impostor scams Speaking on scams in the telebriefing, Bureau of Consumer Protection Assistant Director of the FTC Monica Vaca announced that impostor scams not just climbed to the second spot of the most number of scams, but also have become the most risky phone calls that consumers have received supposedly coming from government agencies.

“Calls from supposedly the Internal Revenue Service (IRS) that that you owe taxes that was never paid and you are going to be fined, you are going to prison or you are going to be arrested if you don’t pay and pay it quick. They ask for immediate payment maybe via wire transfer, or maybe by loading up a prepaid card and giving them the number for them to retrieve the money. In the end, the caller is not from IRS. The impostor is pretending to be calling from the IRS. The caller ID may even say IRS or Washington DC area code,” Vaca elaborated.

This past fall police in India shut down a massive telemarketing fraud ring that was operating outside Mumbai, India, leading to the arrest of 70 people arrested and detention of 600, after they reportedly defrauded 3,000 victims of tens of millions of dollars.

Identity theft Identity theft complaints declined from 16 percent in 2015 to 13 percent in 2016, with 29 percent of 2016 consumers reporting that their data was used to commit tax fraud. There was a jump in consumers who reported that their stolen data was used for credit card fraud; this figure rose from nearly 16 percent in 2015 to more than 32 percent in 2016.

FTC also gathered that people reported a loss of some $744 million in 2016 to fraud, which was lower than the 2015 figure of $774 million lost, including money lost to all kinds of scams, not just impostors.

“Among the most important thing to take note is that 77 percent of consumers tell us that scammers are reaching them by phone, with most people or 58 percent losing money to fraud by paying through wire transfer,” Vaca pointed out. In California, there were 334,631 identity thefts, fraud and other consumer complaints reported in 2016, with fraud and other complaints from California consumers numbering 279,887. The top three fraud categories are debt collection with 100,717 (36%), telephone and mobile services with 38,828 (14%) and impostor scams with 37,147 (13%).

Avoid wire transfer requests This also prompted FTC to urge consumers to be wary of any caller asking for a wire transfer as the government will not ask a consumer to wire money, and it is illegal for telemarketers to ask you to pay by wire transfer, which is a big red flag. Consumers who get a suspicious call should take their time and check it out by calling the government agency on a verified official phone line and not the phone number given by the suspicious caller.

Nevertheless, the FTC is encouraged that even if a lot of people have not lost any money, they still wanted the FTC to know about suspicious calls they received and these calls are helping law enforcement when they file these kinds of complaints. “The FTC cannot investigate unless people call the FTC to say what they see. FTC uses the reports in the system to build cases,” explained Vaca. “Apart from the FTC, other law enforcers including the local police officers, state attorneys-general, and agencies like the FBI look at these reports to find cases to try to stop scammers.”

FTC victories Through these combined efforts to fight fraud, the FTC has obtained judgments totaling more than $11.9 billion for consumers harmed by deceptive and unfair business practices. The FTC anticipates frauds on immigration and health care services to spike as frauds tend to follow the headlines that are likely to transform into a fraud following the trends in the last years.

“Because of the stricter policies, scams in immigration services could see a rise since it is in the headlines. Other stories that are in the news where we have seen fraud in the past include the affordable care act or anything related to healthcare,” reminded Vaca.

FTC has also seen a rise in incidents of family-and-friends scams sometimes referred to as the grandparents scam where the call is about a close relative is in distress and you need to help them in the medical expense or with some sort of emergency expenses to get them out of a bad situation. Consumer Sentinel Data Book According to the FTC’s Consumer Sentinel Data Book, the scams that are on the top ten list of complaints for 2016 with the number of complaints and their percentages are:

North Carolina Attorney General Josh Stein recently announced that the Department of Justice has resolved a lawsuit against predatory auto title lenders in North Carolina. Liquidation, LLC made illegal loans to more than 700 North Carolinians under many names and charged interest rates of 161 percent to 571 percent, which far exceed legal limits in North Carolina. Loan amounts ranged from $800 to $7,000.

“Law-breaking lenders can wreak havoc on a person’s credit and cause financially-strapped people to get even further behind,” said AG Stein. “My office will not allow predatory lenders to take advantage of consumers in this state. Companies that attempt to charge loan shark interest rates will be shut down.”

The defendants solicited the loans online, after which they asked people to send the defendants their vehicle title to secure the loan. If people failed to make a payment, the defendants repossessed the borrower’s vehicle. The defendants were not licensed to make loans in North Carolina and often failed to disclose all of the loan terms until after the borrowers agreed to the loans.

The NC Department of Justice obtained a temporary restraining order and preliminary injunction order against Liquidation, LLC, also known as Auto Loans, LLC, Car Loan, LLC, and Sovereign Lending Solutions, LLC in 2016. After the defendants failed to appear in court, the NCDOJ traced their bank accounts to secure restitution funds and successfully froze $178,000.

The Court’s final judgment provides that: · Loans made by the defendants are void and cancelled; · Defendants are permanently prohibited from engaging in loan business in North Carolina; · The $178,000 in frozen funds will be transferred to NCDOJ for consumer restitution and consumer protection purposes; · Defendants liens are cancelled; · Consumers who still have their vehicles can receive a new title without the lien; · And a civil penalty of $3.5 million will be entered against the default defendants.

Two former employees also entered a consent judgment in which they agreed to permanent injunctions and substantial money judgments unless they collectively pay $15,000 to NCDOJ for consumer restitution. ###

New criteria will strip some negative information from credit reports.

For those affected, scores could rise by up to 20 points.

The new changes took effect July 1, 2017.

Do you know your credit score?

As of July 1, 2017, consumers may have noticed that their credit score has increased.

Improved standards for new and existing public records in the databases of the three major credit reporting companies were implemented on July 1. As part of this change, a majority of civil debts and tax liens will be excluded, which means some credit scores will edge higher.

The new standards follow a report by the Consumer Financial Protection Bureau that found problems with credit reporting companies and recommended changes to help consumers.

Altogether, about 7 percent of the population will have a a debt, such as a judgment or tax lien removed from their credit file, according to a report by Fair Isaac. The company calculates and sells FICO scores, one of the most commonly used scores by lenders.

Once that information is stripped out, their numbers could rise by up to 20 points, Fair Isaac said.

“Analyses conducted by the credit reporting agencies and credit score developers FICO and VantageScore show only modest credit scoring impacts,” the Consumer Data Industry Association, which represents Equifax, Experian and TransUnion, said in a statement.

Still, credit reporting and scores play a key role in most Americans’ daily life. The process can determine the interest rate a consumer is going to pay for credit cards, car loans and mortgages — or whether they will get a loan at all.

In the near term, “it will lower the cost of borrowing,” said Andrei Andreev, an adjunct professor of finance at San Diego State University.

For now, by eliminating those large sources of potential for errors, “we think it will represent credit worthiness better,” he said. (Incorrect information on a credit report is the top issue reported by consumers, according to the CFPB.)

Contact Vujovic Law at www.vujoviclaw.com to see if bankruptcy or other debt options might help address debts that you may have other than judgments and tax liens. Often, a bankruptcy discharge can improve your debt to income ratio, which can make it easier for you to qualify for certain types of credit, depending upon lender guidelines.

Depending upon your individual case, filing for bankruptcy protection can help to finally put a negative credit history behind you and lead to an opportunity to pursue a fresh financial start, enabling you build your new credit history, rather than being overwhelmed by the consequences of credit mistakes of the past.

On June 23, 2017, the Federal Trade Commission (FTC) announced that it has filed a complaint in the U.S. District Court for the Western District of North Carolina against a North Carolina debt collection company and its owner, alleging that the defendants took money from consumers for fake or “phantom” debts they did not owe.

According to the FTC, the defendants bought counterfeit payday loan debts from a lending company through a debt broker and began collecting on the debts. When consumers began complaining that they never took out the payday loans, or that they did not have an outstanding balance, the defendants reported the complaints to the broker, who then provided the defendants with a full refund for their purchase. Per the Complaint, the defendants kept collecting on the debts for more than seven months despite their knowledge that the debts were phony.

As a result of the alleged actions, defendants are charged with violating section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibiting unfair and deceptive acts or practices, and section 814 of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692l, prohibiting the use of false or deceptive means in collecting debt. The FTC seeks both immediate

Earlier this month, the U.S. Department of Education announced that it will delay important new rules that protect student loan borrowers from predatory and deceptive practices.

North Carolina Attorney General Josh Stein released the following statement in response:

“Education is one of the best reasons I can think of to borrow money. But unfortunately, there are some in our world who take advantage of those who are vulnerable – and that includes student borrowers. As North Carolina’s Attorney General, protecting people, including students is my top priority.

“That is why I find this news deeply troubling. The rules, which were to take effect on July 1, would protect student borrowers – delaying them is misguided and irresponsible.

“These delayed rules were hard-fought and sound consumer protection measures born out of the problems that other attorneys general and I have seen plague student borrowers time and time again.”

The delayed protections include:

Prohibiting schools from forcing students to pursue complaints in arbitration rather than in court;

Prohibiting schools from requiring students to waive participation in class action lawsuits; and

Providing automatic relief and group relief for defrauded federal student loan borrowers in certain circumstances, including following legal actions by state attorneys general.

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If you have any questions or would like more information, please contact our Boone office at 828-262-0500, our Hickory office at 828-327-2240, email us, or use our online request form.

We are a Federally designated Debt Relief Agency, assisting consumers seeking relief under the United States Bankruptcy Code. The information you obtain at this site is not legal advice and does not create an attorney-client relationship. You should consult an attorney for individual advice regarding your own situation.